Page 9
December 20,2007
Spilyay Tymoo, Warm Springs, Oregon
W S F P I : report recommends significant investment in mill
(Continued from page 1)
The strategy g ro u p . found
that different interpretations o f
IRMP guidelines, ,a cumbersome
timber sale planning process,
competing interests, and lack o f
sufficient forestry data were all
hampering WSFPI on the raw
material side.
The report pointed- out that
these problems have a long his
tory. Two prior studies, con
ducted in 1990 and 1995, have
undertaken to solve them with
very limited sustainable success.
'“Even if the tribe had no
mill, it would still want to man
age its timber holdings in the
most efficient way consistent
with its environmental and cul
tural standards,” saidTomjackin
ari interview after giving the
team’s report.
“ There’s quite a bit o f room
for management to improve and
get m ote revenue' fro m the
tribe’s timber.”
. According to Tomjack in giv
ing the report, none o f the agen
cies involved in reservation for
estry were keen.about theteam’s
recom m endation to create a
new timber management enter
prise with sole responsibility for
the working forest.
“N ob od y likes this p ro
posal” he said. “But the tribe
needs to have ope. entity in
charge, one entity that answers
tty the tribe fo r executing its
policy. Then if that enterprise
does a bad job, you know who’s
responsible and you, can hold
them accountable,”
Mill Operations
The strategy team had shared
its forest management findings
wjth Cpuncil in an interim re
port, in late November.•■■;.Cpnse-
port dealt with die pplfem* d
ji O ver the past, 20^ .years,
WSFPI bas fallen through the
ranks, from beiiig one- p f the
o f the mill, and getting firiànc-
%
Flood Johnson, journeyman.millwright, is among the 120 people who work at the mill. (Also pictured are Dave Reynolds,
Gerald Sampson and Emerson Culpus.)
most technologically efficient
M ore fundamentally, how
mills in the hforthwest to one ever, failure over the years to
o f the least efficient, according reinvest capital into new equip-
to the report-.
Uient for the mill is coming back
-In six o f the past seven, years to. haunt the tribe. :
WSFPI has lost money, averag
WSFPI’s madiinery was not
ing $2 milHon. ineachj®?the two designed to efficiently process
previous years, and another $2 today’s stpall-diam eter logs*.
million through October 2007. Arid the number o f smaU-diam-
TheSe losses are in addition eter logs keeps increasing.
to approximately $2 million per
“The small logs have been
year o f tribal support through killing the mill,” saidTomjack.
reduced log prices.
“Even a ohe-inebr^s^fi: ddtyriiri
The poor market conditions diameter size costs about a riiil-
: ¡tbafthaye previifiedrinc'e the end
: of';- d2’0 0 6 o • have ;■ .Vrbrstened I gettingluityDe i/ahd >me£$ srtiall
throughout 2Ö07 and have out logs. Without the machiheryro
paced operational, im prove process, those logs* efficiently,
ments;’
WSFPI will n o r be able to com-
Commercial Code
(Continued*;from page 1 ), “
Secured transactions oil
personal property might be
morny, but they’re aisb a p fe
otal part Of the overall code.
T h e absence o f ¿ personal1
property section has caused
difficulties fo r tribal mem
bers who try to get consumer
financing, open and operate
small businesses on the* res
ervation, access banking ser
vices, Or find steady employ
ment.
AmOng the benefits ex
pected from the persorial
property secured transactions
code are that it will:
$jj Create m ore ¿nd better
Borrowing opportunities for
tribal members for items such
as cars, appliances, and Small;
business inventory.
Provide an adequate rem
edy to creditors (such as
banks, car dealerships, whole
salers) in case a tribal mem
ber borrower defaults pn a
loan, making lenders more
comfortable and more likely
to lend money to tribal mem
bers.
E n ab le banks and car
dealerships to locate on the
reservation.
ÉE Help tribal membefô.arid
small business owners estab
lish;, good crédit and become
. better able to borrow addi
tio n al funds fro m o th e r
sources fo r expansion or
other projects. •
Help eliminate usury (high
interest rates* compared to
maiket rates o f f the reserva
tion) w hen creditors lend
money to tribal members.
Cases at tribal court
Despite the potential upside
to members, implementing a
personal property secured trans
actions cope has been contro-
. yersiaL |
The tribe has hesitated to ex
ercise th e jurisdiction o f its
court over non-tribal members.
A nother issue has been that
some' members view the reser
vation as a safe haven when they
default on personal debt.
The new code Will allow off-
reservation cteditOfs to make,
and possibly win their Case in
tribal Court. Í*;
“Tribal members heed to
know that these secured trans
action laws will be applied fairly
and con sisten tly^ said. J e f f
Anspach, chief executive officer
o f Warm Springs Ventures and
a - m em ber o f the A d v iso ry
Committee.
“No matter how good this
code is, if it’s not administered
fairly it won’t work,” he said.
“Lenders will learn not to trust
it and we’ll be right b^ck where
we started, unable- to borrow
mpney at reasonable rates.”
That said, the advisory com
m ittee to o k care to p rotect
people on the reservation.
* ; “We did ouybest to praft this
code in the m ost beneficial way
f o r trib a l m em bers,” said
Anspach. “For instance, our law
will not allow creditors to just
.;,:.cóíúe on the reservation and re-
. possess whatever they think they
have a right to. Instead, they’ll
have t o go « t o tribal court and
get an order, for the yeturn o f
secured property.”
In developing the commer-
cial code, the advisory com
mittee looked to similar laws
used by the United States and
by other tribes, and in par
ticular the Model Tribal Se
cured Transactions A ct that
was- developed by the Na
tional Conference o f Com
missioners on Uniform State
Laws: ‘
T he B IA con trib u ted
funding to review the Model
Tribal A ct for- use at Warm
Springs.
“: “The Model Tribal A ct
shortens and simplifies the
federal law, making an eàsier-
to-Use version,” said James.
“But the one we ended up
with was' even shorter and
easier to use than the Model.
Códèv We adopted the apr
próach that we can add pro
visions later i f we need to.
Let’s start with something
everyone can understand and
get used to easily”.
T he advisory committee
tested the new Warm Springs
code by asking selected lend
ers to review it and determine
whether they would be com
fortable making loans based
on it.
“That didn’t work out the
w ay we h o p ed ,” said
Anspach. “ Basically they told
us, the pro of is in the pud
ding. W hat matters is not
w h at, the law says, but
whether it’s* applied fairly by
the courts. I have confidence
our courts will follow the
rules, but only time will tell
w h eth er this code really
works for the tribe.”
plete.
•Last spring CEO Mark Jack-
son formed a WSFPI Technol
ogy Team and engaged LD
Jellison, Inc., an engineering
consulting firm, to assist the mill
with new technologies, equip-,
. ment.cop^jgurgtions, and sug
gested improvements. *
Working closely with Jellison,
the team came' forward with a
- proposal for a new small log line ;
anchored around a Contact
DDSfr-12 single-pass saw,
“The new mill looks good on
paper,” said Tomjack in his re
port. ‘T he financial projections
show that it would be profitable
under most circumstances.” But
the team was not prepared, to*
recommend the new mill just
yet. \
“There are a number o f im
portant business considerations
that the tribe needs to address
before deciding to go ahead with
an investment o f this size,” said
Tomjack. “You’d be changing
tael
i
redouble tour productivity,”* said f- .m oving *dway t firofet sspeeiaity
Jackaon. “We would go from products arid committing your
processing less than 5 small logs self to competing more in the
per minute on the existing small commodity market. That re
log rpill to over 15. A second quires aggressive- management
shift at the planer- would be and very tight operating stan
needed to handle the increased dards. You’d tided a lot more
output. We’d have, challenges logs to wood ¡this mill and you’d
related to purchasing more non !.have "to; go get them off-reser
reservation logs, longer hauls, vation. I f s all doable, but it’s not
and the sale and marketing o f ■ easy” | '
larger lumber volume. But in our ;
O ther business consider
area, most mills don’t have large ations that Tomjack said should
forest holdings and they pur factor into the investment deci
chase logs for their entire shifts.” sion had to do with managing
- The new logline is estimated the more complicated logistics
to cost $15 million to purchase o f higher log arid lumber vol
and install, With another $5 mil umes, stepping up sales’ and
lion needed to cover related rnarketing efforts, negotiating a
costs such as financing, log yard new working capital arrange
improvements, additional rolling ment with the bank^ intensify-
stock, and so 6rir*,,&
; ing management 6 f all aspects
He also pointed put that the
.tribqcpuld not then sitbackand
let this'new mill go for 20 years
without further investment.
‘Additional investment in the
near future will be required to
maintain the competitive edge
you get from the DDM^” he
said. “That’s the ballgame you’ll
be playing in.”
The strategy team recom
mended that the tribe proceed
With caré in making this invest
m ent "
The report advised that if the
tribe considers the investment
seriously, it should be prepared
to supply W SF P I w ith 5d-
MMBF ofìogs in 2008-09 o f a
diameter size that maximizes the
operating results o f the existing
mill.
t
“That’s the only way the mill
has a shot at breaking even,”
Tom jack explained. W SFP I
would also have to bring back a
plan that provides for cash flow
breakeven during 2008-09, and
prepare a’ thorough capital re
quest and financing plan.
; A t the con clu sio n o f
Tomjack’s report, Council mem
bers asked several questions and
made comments that showed
they w e t , e ready to give thought
ful consideration to the issues
surroumling the f w A'work-
shop session was planned for
late Januaryto go over the strat
egy report in more detail. /:
•Jn the, meantime* Council
, ^§ked J^obson to begin work on
the bridge plan to stabilize ex
isting operations, consider other
revenue generating opportuni-
- ties, and assess near teym busi
ness Options or market condi-
; lions until a longer term strat-
¿flgy antyj^poi?adtyptpd-H
::t •-“WtyhaYe; developed aibtisi-
ness i strategy, that matches the
mill to our ¡forest, and those
around us ” said Jackson. “It will
, Jeàd us . to become a profitable
company. Yes, it is a change
from how we have operated in
the past, but it also provides far
greater opportunity fo r .success
and profit for the mill and tribe.
Through the entire year WSFPI
employees and loggers;?have
worked extremely hard, brought
in new ideas that have improved
our company. I continue to be
impressed by them. These are
' very difficult times, requiring
very thoughtful decisions. This
Christmas season and through-
.'•tìut ’theityeàr, I pray the Lord
guide us alongfour way. M erry
Christmas and G od bless.”
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